Capitalism

All about capitalism

1. PRESENTED BY Umaima Saeed HUSS 201107028 BS IR Laiba Akhtar HUSS 201104021 BS IS Ayesha Imran HUSS 201104001 BS IS Hamna Ramzan HUSS 201104003 BS IS Zain Ullah HUSS 201107007 BS IR Arslan Akram HUSS 201107006 BS IR Abdul Haseeb HUSS 201107008 BS IR Ahsan Yaseen HUSS 201107009 BS IR Arsal Naeem HUSS 201107017 BS IR Abdul Shakoor HUSS 201107025 BS IR Adnan Jatoi HUSS 201107032 BS IR Shahab Ijaz HUSS 201104002 BS IS

2. PRESENTED TO Sir Rao Naeem Ullah Sb.

3. HISTORY OF CAPITALISM The history of capitalism is diverse and has many debated roots, but fully fledged capitalism is generally thought by scholars to have emerged in Northwestern Europe, especially in great Britain and the Netherlands, in the 16 to 17 centuries. Over the following centuries, capital accumulated by a variety of methods, at a variety of scales, and associated with much variation in the concentration of wealth and economic power. Capitalism gradually became the dominant economic system throughout the world. Adam Smith was born in 5 june 1723 and died in 17 july 1790.He wrote a book in 1776 named “The Wealth of Nations”. Adam Smith; Scottish political economist known as Father of Capitalism.

4. DEFINITIONS Capitalism = People + Money + Freedom An economic system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state. When private business owned by people control the economy rather than the government.

5. ISLAM AND CAPITALISM Capitalism cannot grow without interest, usury and ,monopoly. The capitalist system is always exposed to periodic crises resulting from depression caused by low wages and the scantiness of world consumption in relation to increasing production. Abnormal profit All of which were prohibited by Islam about one thousands years before the existence of capitalism

6. FEATURES OF CAPITALISM Private Property: Capitalistic system allows and recognizes the institution of private property. Anyone can earn, acquire or sell property. The property can be passed on to the heirs in inheritance. Profit motive: This is the essence of capitalism. The motive of every economic activity will be profit. Profit motive is the driving force in an individual, partnership and joint-stock companies. Business people will take huge risks to earn large profits.

7. Personal freedom: People enjoy personal freedom in economic activities. This implies: Freedom of enterprise Freedom of contract Freedom of production Freedom in consumption Perfect competition: Since everyone is free in economic field, many people would compete in production and distribution. Sellers and producers freely compete among themselves. Buyers will compete to buy their goods. Workers

8. will compete for getting employment. Due to competition, the fittest will survive. Price mechanism: Under capitalism, the price mechanism makes an automatic adjustment in production, distribution and consumption. All activities revolve around price mechanism .

9. TYPES OF CAPITALISM There are many types of capitalism which differ from country to country and area wise. The commonality between them is that all involve the process of production and work for profit. The major types of capitalism are: 1 . Advanced Capitalism : It involves setting up a system in the society that will prolong over a period of time 2 . Finance Capitalism:

10. It is the most important form of capitalism and rules the capitalist society. The financial institutions dominate other stages politically and economically 3. Mercantilism: It is early capitalism in late 16 th  century across the nation. It involves national to state business interests,  imperialism  etc. In this trade from only within the country was encouraged and expected. Like the colonists who lived in America would purchase goods from their country itself . 4. Free- market economy : In this system, the prices of the goods and services on them decided to the people involved in the trade that is of supply and demand. They do so according to their knowledge of what will work in their knowledge

11. of what will work in their favor. The government does not interfere or intervene in this decision. Hence the prices are set free . 5 . State capitalism : As the name suggests the state dominates the capitalist market economy and everything is organized and regulated under the supervision of the state and no one can take independent decisions.No government interferes in the working of any private working firm. The firms are free to decide whom they want to keep as employees and how much wages should be given. Neither does the government stop any individual from working where he wants to. The government sector and private sectors function separately without interfering into each other’s affairs

12. IMPACT ON MARKET ECONOMY “An economy in which decisions regarding investment, production and distribution are based on supply and demand.” Prices of goods and services are determined in a free price system. The great thing about capitalism is that prices and quantities tend to move toward equilibrium and, for the most part, keep the market stable.

13. LAWS OF SUPPLY AND DEMAND If demand increases and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price . If demand decreases and supply remains unchanged, a surplus occurs, leading to a lower equilibrium price . If demand remains unchanged and supply increases, a surplus occurs, leading to a lower equilibrium price. If demand remains unchanged and supply decreases, a shortage occurs, leading to a higher equilibrium price.

14. CRITICISMS ON CAPITALISM Prominent among critiques of capitalism are accusations that capitalism is inherently exploitative, alienating, unstable, unsustainable, and creates massive economic inequality, commodifies people, and is anti-democratic and leads to an erosion of human rights while it incentivizes imperialist expansion and war . General criticism include Marxism, Anarchism, Fascism, Liberalism and Inequality.

15. Pyramid of Capitalist System

16. ADVANTAGES OF CAPITALISM Competition Freedom to choose Rapid economic growth Private property rights Less poverty Health

17. DISADVANTAGES OF CAPITALISM Waste and Pollution Economic inequality Greed Exploitation of Labour Monopoly Behavior Inequality creates social division

18. CAPITALIST COUNTRIES United States United Kingdom Hong Kong Singapore Australia New Zealand Canada Ireland

19. IS CAPITALISM REALISTIC? Yes Capitalism can be a very successful form of government as long as people make the right choices, as with any form of government. Citizens can be more influential than the government itself, and putting them in control of the economy can make their country a better place.